Massachusetts' distressed hospital fund excludes for-profits

Some hospitals will benefit under a new Massachusetts healthcare law, which aims to net $200 billion through taxes and spending caps and funnel some of the money back into a distressed hospital fund, reports the Boston Globe. But others, including for-profits, will be hit hard.

Struggling Carney Hospital will not qualify for millions in special payments because its parent, Steward Health Care System, is for-profit, for example. Lawmakers, in the 350-page bill, ruled out subsidizing for-profits.

The law aims to rein in healthcare costs, saving the state $200 billion during the next 15 years, which includes encouraging the creation of accountable care organizations and adoption of electronic health records. It will charge insurers a tax, expected to total $60 million over the next four years, that those companies say will only drive healthcare costs higher, FierceHealthPayer has reported. It also provides incentives for insurers to move away from fee-for-service reimbursement.

But insurers won't be the only ones paying. Three Harvard-­affiliated hospital systems--Partners HealthCare, Boston Children's Hospital, and Beth Israel Deaconess Medical Center--will be required to pay a one-time $60 million tax to fund health programs.

Meanwhile, three small hospitals--Athol Memorial, Fairview in Great ­Barrington, and Franciscan Hospital for ­Children in Boston--will be rewarded with higher Medicaid payments because they're considered too isolated or too specialized to fail, the Globe says.

The state has set aside $155 million to help hospitals invest in technology, control costs, and better coordinate patient care, but they'll have to plead their case to a special commission that's being set up to implement the law. That commission has been given broad definition of things to consider in making their determinations, the story says.

To shore up community hospitals, a distressed hospital trust fund will distribute $135 million over four years, with about 35 organizations expected to compete for the money.

Teaching hospitals and those with very high prices do not qualify for the funds. Nor does Carney, though it lost $20 million in 2011. It has dipped from special funds in the past, including $5 million this year from state and federal programs for hospitals that serve large numbers of poor patients.

State Rep. Ronald Mariano said community hospitals will be at a disadvantage in applying for funds because the law requires them to show they have made strides in switching to systems that help providers coordinate care and hold down costs, which requires a technology infrastructure they don't have.

Massachusetts Medical Society also has expressed concern that small practices, in particular, may struggle to comply with the bill's "very stringent" reporting requirements, from both a financial and administrative standpoint.

On top of it all, Massachusetts is expected to be among the states hardest hit by the Centers for Medicare and Medicaid Services' plan, beginning in October, to begin recouping about $280 million in payments from about 2,200 hospitals with high readmission rates.

To learn more:
- read the Globe article